I went to my first REI club meeting last night. Full of information. I’m glad I went.
Anyway, I spoke to a RE investment broker. He will:
. find the best price properties
. provide all documents and forms
. deal with realtors and loan officers
. secure and oversee property inspection
. secure and oversee contractors to get the property ready
. secure and oversee property managers to handle tenants
All this for a fee of $5K, probably negotiable if multiple properties.
I’m new at this and would be my first investment property. I live outside of where I plan to invest. I can learn how to do this myself and develop the contacts I need to do it the next time.
Is it worth the $5K fee? I’m thinking, if I do it myself, I could screw up and overpay $5k (or more) being that it’s my first time. Or have lots of nights with no sleep. Or just hand it to a pro and learn before I do it myself. Just know this, I’m not scared of doing it myself. I have a lot of drive in me. Should I take the faster way to get there?
I am working with a guy just like this. The price is the same also. You have to put provisions on him that the properties he brings you must meet your investment requirements including his $5k. That means he has to save his commission or no deal. Before I started dealing with him, I was doing a property every 2 to 3 months. It has taken me 6 months for him to find me 2 properties. He brings them in regularly but I turn them down because he hasn’t covered his $5k.
The advantage with my guy is he is doing them with 100% financing. All I have to do is qualify and I get the property. This will enable me to move faster and acquire more property than I would be able to do alone (his sales pitch). If I accepted all the properties he has brought, I would have my $2million by now. But I am not in this to own property, I am in it to make money owning these properties.
Well, I haven’t committed to anything yet. That’s why I asked this forum for advice before I made my move. I’m a rookie at this and I’m trying to get in the game. But at what cost? I have the money to pay him but I don’t want to waste any of it and get nothing back. If it gets me in the game safer than doing it myself, great. If I will learn from it so I can do it the next time, great. If it will give me the contacts I need in that area, great. If it will save me the headaches and no sleep, great. He’s been doing this for 27 years. I can learn from his mistakes. Yes, I can learn this by myself. It’s just a matter of time. But if I get there safer and faster, then the $5k may pay for itself many times over in the long run. To me, it’s not about the pride of learning by myself. It’s a strategy that may pay off some day.
After this guy brings you the properties , what kind of criteria or equity are you looking from on top of his 5k fee? If you can still make a profit while giving him 5k, thats pretty good. It sounds like he might be a wholesaler- property manager-secretary. Also is he assigning the contract to you or are you signing a separate contract? I would make all the contract subject to appraisal, so you wont even have to take a look at the property until the appraisal comes back, giving you more free time to search out more deals on your own.
He sounds like a valuable resource.
He will present me all the numbers before I pull the trigger. He will not even show it to me unless it meets my criteria. That’s the idea, get a good cash flow property on top of his fee without all the headaches a newbie may encounter. I am signing a separate contract. He simply brings me the deal, and I’m in the driver seat. Yes, the appraisal will be looked at before any committment is made. Wow, I’m in another forum about this topic and they make it sound like this guy is a crook, they haven’t even met him. Anyway, still haven’t decided on this. I’m still looking for more feedback.
I never made this guy out to be a crook. I am just asking you a few simple questions. If you have noticed i said he sounds like valuable resource. Do you know why you are signing a separate contract? Do you even know why i ask this? I can almost imagine the transaction clearly. But from the last comment you made, i will keep this to myself.
Best wishes.
:flush:
Charlotte - you misunderstood my comments. I was in another website (Agentsonline.com) and they make it seem like this is a very bad thing. They are saying I can do this for free by doing some research. Yes, I believe that. But I don’t think working with a 27 year pro, who’s made thousands of deals, is the same thing. Anyway, I wasn’t trying to flame you.
What is a real estate investment broker? If he is not a licensed real estate broker, then your first red flag is a made-up BS title which he has given himself.
If this guy has been doing this for 27 years then why doesn’t he just do his own deals instead of selling his services for $5000 per deal? In other words, if he’s so smart, why aint he rich?
Is he offering to work exclusively for you? If not, then what makes you think he will give you the “best price properties”?
Does he get paid also by the contractors which he “secures and oversees”? Where is his incentive to keep your costs down?
The only way he can oversee a property manager is if he owns the real estate brokerage which manages the property.
He will deal with loan officers??? Why would a loan officer talk to HIM about YOUR purchase? Answer : they won’t.
Maybe he is legit, maybe not. Either way, he is puffing up his title and telling you that he can do things which he can’t do. Why not just find and do your own deals?
I agree with Steve. My BS detector is giving me a strong reading.
If you want to pursue it, ask to speak with 2 or 3 current or past customers. When you talk to them ask them to give you the address of property transaction that this guy set-up. Then go look it up at the recorders office to verify the transactions.
Sounds like a lot of work? sure, but I’m willing to bet he won’t past the test…
unfortunatly flip I ve been in the business in the capital state of fraud : floridaand let me tell you in my five years Ive found that helpful investors who are on the up are fewer and farther between than the needles in the haystacks.
I never heard it called investment brokering, but these guys serve a specific need. A person that wants to move faster than he can by himself, or a person that does not have the time to do the services themselves. I am in the latter group. Because of my day job, I don’t have time to find the deals I need to meet my goals. He finds them for me. He finds a bunch of them. They just don’t all meet my specifications. If you have the knowledge and time, don’t use him.
2. If this guy has been doing this for 27 years then why doesn't he just do his own deals instead of selling his services for $5000 per deal? In other words, if he's so smart, why aint he rich?
My guy has 50 houses himself. He manages property and does this investment brokering. As I said before, if you put as one of his requirements that the deals that he brings must meet your income goals as well as pay his fee…not either or, but both, then you have a win-win.
If he has an actual company that provides this service check it out with the local BBB. Obviously if he’s freelancing it you won’t find anything at the BBB.
I fall in both categories. I’m busy with my day job and family after. Nor do I have the experience. The only knowledge I have is from this forum and a couple of books I bought. I put in a couple of hours at night and weekends to learn.
I will certainly tell him to meet my income goal as well as pay for his fee. If he can’t meet that, I will walk. Just thought I can skip all the mistakes I may get in to by learning from a pro. Also, I want to get in to a property now. 1 mistake can cause me more than $5k. Thanks for the advice.